Mileage Fee – Mileage Penalty

The term mileage fee or mileage penalty  in car leasing refers to the per-mile charge at lease-end for excessive miles driven during the lease — miles over the limit allowed.

Lease mileage fee is generally \$0.15 per mile for cars that cost up to \$30,000, \$0.20 a mile up to \$50,000, and \$0.25 or more for cars that cost more than \$50,000. The fee for some luxury vehicles may be higher.

Mileage charge is always specified in car lease contracts as a per-mile fee. The fee is not negotiable.

As an example, let’s say you’re leasing a \$40,000 car for 36 months (3 years) at 12,000 miles per year, which is a total of 36,000 miles allowed. (It’s the total miles that is important, not the annual miles.) But it’s time to return your car and it has 42,000 miles, which is 6000 miles over the allowance. At \$0.20 a mile, the total excessive mileage fee you’ll have to pay is 6000 x \$0.20 = \$1200.

Excess miles charges at lease-end are not negotiable.

You can use our Lease Mileage Calculator to make the job of calculating excess miles fees much easier. If you know early enough that you are exceeding miles, the calculator will even predict the lease-end miles and show you the cost. It’ll also show you how much money you should put aside (a reserve) each month to have the money you’ll need at lease-end to pay the charges.

You can always avoid mileage and wear-and-tear charges by exercising your option to purchase your vehicle at the end of your lease.

If you know at the beginning of a lease that you will drive more than “normal” miles, you can “purchase” the extra miles up-front, which will increase your monthly payment slightly. Most lease companies will refund for any unused miles (of the purchased miles) at lease-end. See our article, Extra Miles Car Lease for more details.

For more details about car lease mileage fees, see our article, Over Mileage Car Lease.

Mileage Fee – Mileage Penalty